You may have read Miranda Devine’s recent Daily Telegraph piece, criticising The Australia Institute’s research and contribution to the company tax debate.
Ben Oquist, Executive Director of The Australia Institute responded in a follow-up piece published in the Daily Telegraph on July 6 which we have reproduced below.
Above: Executive Director of The Australia Institute, Ben Oquist, on Q&A
Think tanks play an important role in helping lead the public intellectual debate and The Australia Institute takes this role very seriously.
We barrack for ideas, not political parties. That is why we have published extensive research into the economic case for the company tax cuts. In short, the economics do not stack up, no matter who is Treasurer.
In fact, the Australia Institute’s earliest research showing there is no link between company tax cuts, employment and economic growth was published in 2012 — when Labor was in government.
Our research has not changed since then, because the data has not changed. There is no correlation between lowering company tax and economic growth. Wages and mixed income have declined as a share of GDP as corporate taxes have been lowered. Average unemployment rates have risen as company tax rates have fallen. Growth in foreign investment as a share of GDP was strongest when Australia’s company taxes were highest.
Our research has also shown that the big four banks will get an extra $9.5 billion dollars, the big winners from the company tax cut will be tax avoiders and foreign shareholders, just 15 companies will get a third of the benefitsand that investing in schools and education is more likely to help the economy than giving businesses a company tax cut.
The video promoting our research said “Company tax cuts won’t benefit jobs or the economy.” We stand by that. Furthermore, the proposed tax cut for large companies represents a revenue time bomb for future budgets. Every dollar of tax we are not collecting from large companies is a dollar that cannot be spent on hospitals, schools, aged care, infrastructure or increasing Newstart above the poverty line.
A few years ago, conservative commentators were worried about debt and deficit. Now debt has grown, but somehow Australia can still afford $200 billion worth of tax cuts. In contrast, our research is consistent no matter who is in government.
The Australia Institute is independent and non-partisan. Indeed, we publicly welcomed the Turnbull government’s extension of the Pension Loans Scheme to aged pensioners in the last budget — an idea first put forward in our 2014 report ‘Boosting retirement incomes the easy way’ — and backed by other think tanks. And we publicly defended Treasurer Scott Morrison’s bank levy, testing two criticisms of the levy and found that both were overstated and that the complaints of the banks should not be taken too seriously.
All our research is freely and publicly available on our website. Last financial year we published 157 reports and submissions. All political parties or candidates are welcome to take on our ideas and research and many do.
Because at The Australia Institute, we will oppose bad policy ideas from any side of politics just the same as we will back a good policy idea. It is the idea that matters, not the political party promoting it.
Ben Oquist is Executive Director of The Australia Institute. @benoquist
Originally published titled ‘Dividend in Taxing Research’ in the Daily Telegraph on 6 July 2018.